Given the enormity of the U.S. economic crisis, probably not. But if history repeats, the category could give a boost to a particularly weak retail year. Amid the dire forecasts, stores are pushing well-priced gift items they hope will be bright spots.
In last year’s fourth quarter, accessories was the revenue leader, generating a 32 percent share of department store sales, while apparel was 29 percent, according to research firm the NPD Group. And jewelry, watches and handbags were at the head of the pack. Jewelry and handbags also dominated third-quarter accessories dollar share at 52 and 19 percent, respectively. In jewelry, watches led at 21 of the 52 percent total.
“Accessories have always remained very important to us, but perhaps they’re different than before,” said Ron Frasch, president and chief merchandising officer at Saks Fifth Avenue. “We’re seeing a greater interest in accessories that are more gift-giving accessories, maybe things like small leather goods, soft accessories. We’re seeing the good in spite of everything, especially across the contemporary accessories zone within handbags under $1,000.”
Frasch cited brands such as Marc by Marc Jacobs and Tory Burch as those weathering the storm in handbags, and established labels such as Cartier, Chopard and Graff in Saks’ fine jewelry segment. He noted that jewelry brands spanning multiple price levels, such as David Yurman and Judith Ripka, are hanging tough.
“We believe very strongly in our jewelry and in product that is not ‘of the moment’ — product that is an investment piece and will hold up well,” Frasch said. “People make purchases or investments in jewelry from those companies with strong brand credibility.”
However, as the luxury sector feels the full force of the troubled global economy, Saks Inc. this month posted a third-quarter net loss of $42.8 million, or 31 cents a diluted share, compared with last year’s net profit of $21.6 million, or 14 cents a share. Saks said for the first time in memory its shoe and handbag business was suffering, even after opening a luxurious shoe floor at its Manhattan flagship in August 2007.
Last week, the retailer offered up to 90 percent off on select merchandise in a bid to keep traffic flowing throughout the store. According to one saleswoman, it reached “pandemonium” in the handbag department where they “were practically giving things away.” Handbags normally priced at over $1,000 were on sale between $100 and $200. By Monday, the handbags located near the elevators were completely gone, and in its place were Magaschoni cashmere sweaters at 40 percent off. Last week, designer shoes were listed at 40 to 70 percent, where a line formed for entrance into the eighth floor department. Lines were also evident Monday in the fifth floor footwear department, and the entire floor was teeming with people, combing through sale racks. The retailer is said to continue to offer big sales through year’s end.
Jim Gold, president and chief executive officer of Bergdorf Goodman, said the store is also pushing through holiday with the help of “iconic brands that will stand the test of time,” such as Chanel, Bottega Veneta and Nancy Gonzalez. Accessories fare especially well in a challenging economic climate when consumers may consider “recycling an outfit or postponing a major wardrobe purchase,” but still spend on accessories that can complete a look.
Barneys New York is focused on offering items shoppers can’t find elsewhere, such as its exclusive launch of Proenza Schouler handbags.